Finance

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"Multiple Choice (1 Point each) One of the basic premises of security analysis, and in particular fundamental analysis, is that A) a stock's price is based on its past cash flows, rather than on anticipated future cash flows. B) market sectors do not move in concert with business cycles. C) all securities have an intrinsic value, but some securities may be incorrectly priced in the market at any given time. D) a security's risk has relatively little effect on the security's return. Document Preview: Multiple Choice (1 Point each) One of the basic premises of security analysis, and in particular fundamental analysis, is that A) a stock's price is based on its past cash flows, rather than on anticipated future cash flows. B) market sectors do not move in concert with business cycles. C) all securities have an intrinsic value, but some securities may be incorrectly priced in the market at any given time. D) a security's risk has relatively little effect on the security's return. Increases in interest rates and increases in taxes both tend to A) have an expansionary impact on the economy. B) have a contractionary impact on the economy. C) signal the beginning of a bull market. D) signal the trough of a recessionary market. The risk-free rate of return is 5.5 percent, the expected market return is 11 percent, and the beta for Lea, Inc. is 0.85. What is Lea’s required rate of return? A) 4.7 percent B) 10.2 percent C) 14.9 percent D) 15.7 percent Intrinsic value is based on which of the following factors? I the applied discount rate II. the amount of risk inherent in a particular stock. historical net profits of the company estimated future cash flows of the company A) II and IV only B) I, II and III only C) I, II and IV only D) I,II,III and IV Followers of the random walk hypothesis believe that A) security analysis is the best tool to utilize when investing in the stock market. B) the price movements of stocks are unpredictable, and therefore security analysis will not help to predict future market behavior. C) the price movements of stocks follow a ""flag"" formation, and charting this formation can help an investor time his or her purchases in the stock market. support levels and resistance lines, when combined with basic chart formations, yield buy and sell signals. One widely followed measure of the business cycle represents... Attachments: Fin411.final.....doc Oct 11 2013 09:34 PM"

 

Solution ID:608805 | This paper was updated on 26-Nov-2015

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